Your current investment will mature in 2 years for $30,000, at which time you will reinvest the funds for 10 more years at 7% per year. What will be the value of your investment at the end of the 12th year?

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Answer:

A = $ 55,200.00

Equation:

A = P(1 + rt)

Calculation:

First, converting R percent to r a decimal r = R/100 = 7%/100 = 0.07 per year, then, solving our equation

A = 30000(1 + (0.07 × 12)) = 55200 A = $ 55,200.00

The total amount accrued, principal plus interest, from simple interest on a principal of $ 30,000.00 at a rate of 7% per year for 12 years is $ 55,200.00.

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